• July 23, 2021
• Misappropriation

Reported instances of broker theft out of customer accounts are on the rise, and the move to all-online access to brokerage accounts and transactions may be making it easier for unethical financial advisors to act. So what can you do to reduce the chances that your financial advisor has access to your outside bank accounts, credit cards, and other financial instruments? Here are some strategies to protect yourself and steps you can take if you suspect you’re the victim of a crime.

Only trust your money to a reputable investment firm.

Do your homework and check out any company you plan on investing your money with. Are they qualified? What are their specialties? Are they a member of FINRA? Does your investment advisor have any disclosures on file that would caution you against doing business with them? Spending a little time researching your brokerage before opening an investment account can save you a big headache later. And even if you’ve already become a customer, it’s never too late to ask these questions.

Know what your brokerage’s policies are.

Many companies have written policies in place that govern how and when their brokers are allowed to act in regard to customer accounts. Some will outright promise to replace your funds if they’re stolen through unauthorized access. If you’re at all unsure of the policies at your brokerage, ask questions about who can access your accounts and what security measures are in place. Ask about physical as well as electronic security practices.

Understand what’s going on with your accounts.

Check your transactions online regularly and review your statements carefully. Report any unusual activity immediately. If you and your broker have a conversation about money moves, follow up with written communications to ensure your directions are followed and to document your intended actions in case your broker goes rogue. Pay attention to when you receive letters from the brokerage firm inquiring as to your satisfaction with their services; maybe they’re truly concerned about their service to you, and maybe they’ve identified unusual activity on some customer accounts, including yours.

Remember, your broker works for you.

Most brokers are ethical and operate only within professional standards and laws; so if your broker seeks financial account information that seems unusual, stop and ask why they need it. If your broker isn’t giving you prompt and clear answers to your questions, there may be a reason to worry. Don’t be afraid to speak up about your concerns–the money in the account is yours. If your broker’s tone becomes aggressive, demanding or bullying, that’s a red flag. Brokers aren’t permitted to make trades without your authorization unless you’ve permitted your broker discretion over your account, and even then, suitability and other standards to protect you still apply.

Get help.

If you’re not satisfied after speaking with your broker, every firm has a compliance department that can help. You can also turn to state and federal regulators to file a complaint. Legal assistance can provide you with additional help in resolving your concerns and recovering your money. Investment firms are responsible for the actions of their brokers, and hiring an attorney to address the matter for you can achieve results.

The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at mwolper@wolperlawfirm.com.